Events Opinions

2016 Hostelworld Conference Recapp

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Dennis Pitcock
Written by Dennis Pitcock

For those who were unable to attend this years Hostelworld conference. Do not worry, those of us who have, do not remember much. Even considering the full-hearted collaborative attempt and failure of the at trying to drink the Guinness factory out of supply,  many of us did not miss a beat when it came to the information. Lucky for you, I was one of them, and I will do my best to give you my high level take of what the conference was really about.

Now I’ve been to many conferences. Luckily for me, it was part of my employee contract when I first started at Apple Hostels in Philadelphia, where the owners saw some value in sending me. My first was in 2009. I’ve skipped a year here and there but this was my fifth conference, and my first conference where everyone left totally content, on the same page. Here is why.

Hostelworld Self-Discovery

Hostelworld’s float/IPO could be the best thing to happen to them.  Now hey have shifted their attention to making their investors happy to making their shareholders happy, and it seems as if a huge weight was lifted off their shoulders and they now can look up at the big picture, not just the snapshots their investors wanted them to focus on (which was most likely to get acquired by one of the big fish Priceline/Expedia/Tripadvisor).

This is not to say that an acquisition is off the table, it could happen years down the line when Hostelworld proves their value, growing the company and influencing the industry. They can focus on growing their value which is the service they provide to both their customers and their partners, and through this value, that will play a major role influencing their industry. Yes, they have to answer those people, the shareholders but now there is an easy measure to their success; as they develop more value, their stock prices will gain more value too.

It seems as if the past year and a half to two years, as the possibility of floating became more and more the best option for them, they look internally at how they can improve as a company and become something the general public would want to invest in. They restructured teams, added some key players such as Otto their CMO, redesigned the sites, the brand, the logos, and more. This trend continues to today, and it is evident that they have a stronger sense of self and their core mission which something that couldn’t have been said before.

Securing their Spot

Now that they have found themselves, they can now properly see how they fit in with the bigger picture of online travel overall. This is the first time I’ve seen Hostelworld really securing their position like such. Since Otto joined the team, he has slowly been taking on becoming the outward Face of Hostelworld to their industry peers. Feargal has been doing a great job, but the organization realized the executive team needed to grow so each member can each focus on their strengths to grow the company. Now that there are few, they can attend more industry events and network with the right people. They’ve been attending and the industry wide conference and forums held by the industry leaders such as Phocusrwright and Skift, networking securing partnerships such as that with GoGoBot and finding mentor/advisors such as their newly formed relationship with Carl Shepherd from HomeAway. The fruit of which has been shown at this years conference. Leaving clues to the exciting times ahead for the company.

A Much Needed Confidence Boost

Not only did they attend the Phocuswright conference and represent the hostel industry, they commissioned a Phocuswright report on the hostel industry and the hostel traveler, which doesn’t come cheap. Phocuswright is one of the industry leaders in procuring such reports, so it is a natural fit. Douglas Quinby, the man behind the research, went up on stage gave us the high level snapshots of the results of the report, the nature of the industry and their customers. He is probably still sifting through the data working on conclusions right now. They ask the right questions and retrieved the data which we can now see how it all ties into Hostelworld new overall goal, to focus on hostels and grow the pie (of hostel guests). This came is a huge relief considering their past efforts that were alienating some partners, who felt Hostelworld was, and I’m paraphrasing from Rucksack Brian, serial HOSCAR winner and Hostelmanagement.com team member, “(Paying Google to) intercept guests who would find us otherwise, and charge us to receive that guest.”

The Phocuswright report has shown that hostel guest is a remarkable unique customer worlds apart from those of hotels. It has shown that the sharing economy has shined a new light onto the industry, and opened it up to much more opportunity in under presented markets.  And Hostelworld will use its new marketing talent to seize that opportunity and send us more guests overall. In the past they added hotels, Hostelbookers even added campsites, just about anything other that hostels, but now they are focusing on you. Hostels are their core, and with the insights of this report, Hostelword has vowed to return to its core competency, which is great for the industry overall.

Usually Phocuswright charges heavily for their reports, but rumor has it a fairly detailed report will be available for free compliments of Hostelworld. It will have valuable information to help us sharpen our strategies as well as give their shareholders the confidence in their leadership and direction. Of course, all reports like such should be taken with a grain of salt, but overall it will have a strong impact on the industry.

The Focus is on You

Now Hostelworld really knows what they want, they have been building a strategy to go get it. They realize their customers are spending their money on hostels, so they will do their best to get them to spend more, and stay at more hostels, building awareness and experiences to help the hostel grow overall. They most likely have implemented measure to track the success, and are boosting their expectations of their accounts team to really drive this home. They have talked happily about a new CRM, which will help them spot opportunities for growth and then they can measure the performance and use that data to even better the next time around. They have tons of data, and now they are using it wisely, with the right tools, and the right teams,  I wouldn’t be surprised if you get a call or email from your account manager out of the blue to talk to you more about strategy and “the market’ than ever before. Of course, they can only give you broad benchmarked data and insights, but it will be significant to help you manage your expectations and obtain more revenue overall.

On a sidenote: Hostelworld really understands its role as a marketplace, focusing on both its customers and the hostels themselves. Otto championed on the role of nurturing the relationships. He even came out the the unofficial afterparty at Coppers, only to be there early in the AM. Now that is dedication.

They also invited us to participate in their viral marketing strategy. They are offering the opportunity to propose new challenges to your guests that will boost their brand and the awareness of the hostel experience overall. Think about what have you always wanted to get your guests to do that was out of their budget range. Think about their Skydive Skye Your Parents video. What would you get your guests to do, that was crazy, if Hoselworld would pay for it? Reach out an get it done!

The reason why? Hostelworld needs to build the brand around the experience rather than just the bed. The unique value proposition of the entire industry is the experiences and connections hostellers make with others as they travel. The Phocuswright report even mentions that there is an ocean of alternative options for our guests, such as airBnB, campsites, couchsurfing, and even hotels (yes major hotel brands are building and catering to our guests) to name a few. All of them are coming after those same guests as we are, and both us and Hostelworld need to capture that experience and get our guests hooked, addicted to hostelling like the latest drug. It has kind of happened already. The rise of professional hostellers and the yuppie hosteller with disposable income proves that as that regardless of income, their needs might change overtime, but the experience is still in high demand, and many hostels are adapting to meet those changing needs to keep them coming for years down the line.

Other topics touched were the basics of revenue management, the significance of ancillary revenue, and how to fight off petty competition. Overall, the Hostelworld Conference was, as the Irish would say, “Grand”. They always put on a good time, but it is time to get serious. Carl Shepherd stressed how fragmented the industry is, and it is obvious it will only fragment more. The industry is  maturing, and it is becoming ever more difficult for the “long tail*” hostels to adapt. You must sell the experience, share your knowledge with your peers, and do your best to grow, and Hostelworld promises to do just about the same. It may sound like I am sucking up to Hostelwold, but I am just reflecting the sentiment that I felt overall, and many others felt the same. May there be many more conferences like it to come. We need a rematch, another opportunity to take on the Guiness challenge one more time.

*Long tail primarily but not neccessarily refers to small and medium hostels. To determine who is long tail, in the eyes of Hostelworld, take every hostel/chain in the world, and the amount of revenue they make. Stretch them out on a horizontal line, and arrange them by the highest earners, or as Hostelworld would see them, the highest contributers to their earnings, first. Now you will see the bulk of their revenue will come from a few key players, and the rest stretch out in a long tail. Hence, the name “Long Tail.”

 

About the author

Dennis Pitcock

Dennis Pitcock

Dennis jumped into the hostel industry after a summer backpacking Europe in 2008. He went from being a guest to a manager within weeks, and currently does consulting for large and small hostels alike in 3 continents. Prior, he worked in eCommerce, so he has passion for the tech side of the industry and is now deeply entrenched in the hostel and activities industry.

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